Retirement White Paper by misty dealy

Planning For Retirement Insights into the experiences of retirees

ÂŠ 2012 Charmaine Curtain

Global Partnerships Financial Consulting Mezzanine, Level 1, 452 Flinders Street MELBOURNE VIC 3000 T: (03) 8614 1616 F: (03) 8614 1600 W: www.gpfc.com.au This report may not be reproduced without the prior permission of the copyright owner.

Contents Research conducted and published by Charmaine Curtain.

Introduction..................................................................................................4 Methodology................................................................................................5 About the Author..........................................................................................6 Planning for Retirement................................................................................7 Visions of Utopia..........................................................................................8 Mixed Emotions.........................................................................................10 Retirement Purchases................................................................................11 If I Had My Time Again…...........................................................................12 Adjusting to a new way of life....................................................................13 Exceeding Expectations.............................................................................15 The Best of Times, The Worst of Times......................................................16 The Lifestyle of the Retiree.........................................................................17 Busy – as usual...........................................................................................18 Hobbies......................................................................................................19 Reading Habits...........................................................................................20 Making the Money Last..............................................................................21 Skiers..........................................................................................................22 In Denial.....................................................................................................23 Advice for the almost-retired......................................................................24 Summary....................................................................................................25

Introduction

There’s nothing very retiring about many retirees. In fact, if the findings of this research are anything to go by, many retirees are as busy or busier than they were when they were working. And maybe that’s not so surprising, given that so many people are now living longer, staying healthier and surviving what were once were the deadliest of diseases – namely, heart disease and cancer. Australia’s Health 2010, our national biennial report card on health, released by the Australian Institute of Health and Welfare (AIHW)1, revealed that if Aussie men make it to retirement age (65), they can now expect to live a further 19 years. Australian women can expect to live a further 22 years. You can do a lot of living in 20 or so years. I’ve been helping people retire now for over 20 years and I really enjoy seeing those clients that are living their dreams and making the most of their retirement. Seeing clients transition well into retirement got me asking, “just what is the key to a good retirement.?” I was interested to find out how they adjusted to life after – what was in many cases – a life consumed by their careers. What were the factors that kept them interested and engaged in life; how were they faring mentally, physically, emotionally and financially? In essence, what is the ‘secret’ of a happy retirement? Physical well-being proved to be only one factor. Equally important to the people I spoke with was mental health, described by many people as simply, ‘keeping busy’. Having something worthwhile, interesting and stimulating to do is as important to us when we get older as it is during the rest of our lives. I would like to take this opportunity to thank those of my retiree clients who so generously gave of their time to be interviewed for this research. My hope is that it will help pre-retirees, and the professionals who work with them, better prepare for the busy years of retirement. One of my favourite quotes for retirement is “don’t retire from something, have something to retire to.”

Charmaine Curtain To respect the privacy of the interviewees, responses are anonymous. AIHW 2010. Australia’s health 2010. Australia’s health no. 12. Cat. no. AUS 122. Canberra: AIHW.

Methodology A small, select number of retirees were asked a range of questions around their experiences leading up to and following retirement. Most of the people surveyed (38%) had been retired for between one and five years. A quarter (25%) had been retired for more than 10 years, while almost a fifth (19%) were recent retirees, retiring less than a year ago. Only 13% had been retired for between five and 10 years and 6% did not reveal how long they had been in retirement. More males (56%) than females (44%) participated in the study. Some were married couples. Husbands had retired before the wife in 67% of cases. Wow this is not normally the case. Maybe a distorted cross section of clients. Twenty-six per cent of partners were still working, either full time or part time and half of these were the female partner and half were the male partner. One of the main reasons for continuing in the workforce appeared to be financial or that they enjoyed what they did. This paper attempts to shed some light on how to have a successful retirement from the experience of those that are living the dream . I hope that people who read this leading up to retirement can take something from it so they too can have a successful retirement. This paper is by no means a scientific or exhaustive study of retirees, but it does provide a snapshot of the retiree experience in todayâ&#x20AC;&#x2122;s world.

ÂŠ 2012 Charmaine Curtain

About the Author CHARMAINE CURTAIN CFP, B.Ec, Dip FP, MAICD Principal Wealth Adviser and Practice Principal Global Partnerships Financial Consulting Wealth Coach Practice Principal Director

Financial & Investment Planning Experience “Our role is to coach and inspire you to live the life that you want, free of stress and worry about your financial affairs.” Charmaine has over 20 years’ experience coaching and inspiring her clients to live the life they want free from stress and worry about their finances. She believes by having a great financial coach to create, manage and protect your wealth you can spend more time on the areas of your life that matter most. Her contributions to industry development through the design of innovative solutions tailored to her clients’ individual needs led to her being recognised as 2008 Advisor of the Year by her peers, ahead of more than 200 other candidates Australia wide. Her business was also awarded the Godfrey Pembroke Premier Practice Award in 2006. Charmaine’s educational qualifications include a Bachelor of Economics Degree, a Diploma of Financial Planning, she is a Certified Financial Planner and a Member of the Australian Institute of Company Directors. Charmaine spent 9 years as a Senior Advisor at Deutsche Bank and prior to that she served 6 years in the Air Force as an Intelligence Officer. She is the Director and Practice Principal of Global Partnerships Financial Consulting. Charmaine is closely involved with a number of business development groups and has been a board member on an industry round table. She also directly supports a Vietnamese orphanage through business profits and participates with local community groups during her spare time. She is a member of Women in Finance, the Bayside Business Network, volunteers with the White Lion Association which assists underprivileged children and has been involved with various Rotary organisations.

Planning for Retirement By the age of 65, most of us have accomplished whatever workrelated goals we are going to reach. If you haven’t done it by then, chances are you aren’t going to do it. Take the retirement, take the pension, take the Social Security, and sail off into the sunset. ~ Sue Lasky

Many people (38%) spent a significant amount of time (between two and three years) thinking about retirement. Typically, these people were prompted by a career event – for example, long service leave, the offer of redundancy or a career anniversary. As one woman reflected, “…the Ministry of Education sent me a certificate to say ‘Congratulations on working 35 years’ or something and I thought, that’s very silly, its time I took off.” But thinking about retirement didn’t always mean formally planning for the event, with another woman admitting: “I’d been thinking about it for a couple of years… And when it came to it… you can’t say I was terribly well planned it was more, look I’ve enough of this, I can’t be bothered getting up in the morning and let’s just do it … I’m not very good at planning.” Just as many people (38%) did not think about retirement at all before the event – for a variety of reasons. A third of them had retirement thrust upon them by ill health or redundancy; a third had simply not thought about it at all and a further third had thought about it but had not done any formal planning for the event. “I don’t know that I ever really had a fixed plan,” one confessed; while another observed: “I knew it was coming for some time because I had to retire at 70… Planning, I don’t know if I planned it that much, but, well, I suppose I did…” Only 13% said they had planned for their retirement more than five years ahead of the event, and all of these respondents were men. Interestingly, most men (66%) spent quite a long time thinking about retirement (more than two years) while the remaining third (33%) spent no time at all. This compares starkly with the experience of women, almost half of whom (43%) spent no time and a total of 71% spent less than two years thinking about retirement. Almost a third (29%) thought about retirement for between two and five years before the event.

Visions of Utopia Utopia is that which is in contradiction with reality. ~ Albert Camus, Between Hell and Reason

50%

19%

Retirement was envisaged by most people (50%) as a time when they would finally have the freedom and time to explore their own interests and do their own thing. One man went so far as to say that he expected retirement to be just one big holiday:

Almost a fifth (19%), also all men, said retirement was about stopping full-time work –although that did not necessarily mean they would stop doing things. “… you can’t just garden or decorate your house or do that sort of thing for the rest of your life – you’d go crazy,” one man said. “You can’t depend upon going down to the supermarket for social interaction… I knew that … I would need to have things in my life that kept me really busy, that I was interested in doing.”

“I had a picture of sitting around doing nothing, enjoying myself and not having to meet any deadlines. A holiday. Just one big holiday,” he said.

31%

19%

A third of people (31%), almost all of them men, said they were or wanted to continue to work in a part-time capacity. One man even said he started a retirement business shortly before retiring and wished he had set it up earlier. “My ambition was to continue to work… I should have started that business before I retired, on a very small scale.”

The same number of people (19%), all of them women, had no vision of retirement whatsoever, “… it always seemed quite far down the track,” one said, “so I hadn’t imagined it.”

ÂŠ 2012 Charmaine Curtain

Mixed Emotions It´s just emotion that’s taking me over. ~ Emotion by The Bee Gees

Many people (43%) were quite emotional on their last day of work. “I walked around everywhere … and thought ‘I’ll never have this big a job again,” one person said, “And there was a real sense of farewell at that point.” In the words of another: “I can remember it very well … it was a mixture. I was a bit sad. It was a bit of an anticlimax. You’d finally come to the last day, and you think, ‘After working for 40 years, this is the end …’ a bit of a strange day, I have to say. And also for probably a couple of months afterwards it did feel strange… initially you do miss … not getting up and going. It is a big adjustment.’ A further 21% felt quite depressed on their final day of work. “It was awful,” one woman said, “... it was such an empty, empty horrible feeling but it probably took me a few weeks to get over that; I’d get a bit teary about it... I just thought, ‘Oh my God, I’m never going to do A, B, C again’ and then I woke up and got on with it. But I did feel very sad.” But more than a third (36%) expressed relief and happiness at the thought of never working again. As one man said, “… when I got into a financial position where I recognised that I didn’t have to work any more... it took all the pressure off.”

Retirement Purchases I’m now as free as the breeze — with roughly the same income. - Gene Perret Almost all respondents (79%) made a big purchase of some kind at about the time they retired. Usually, this purchase was related to overseas and occasionally domestic travel. Other big spends were related to home renovations and, in the case one couple, bringing forward their children’s inheritance. “[one of our sons] wanted to come and live [in the family home] with his family and … to help that happen we sold it to them and distributed the asset value of that a quarter to us and a quarter to each of the other three boys.”

If I Had My Time Again… If I had my time again, I’d do it all the same. Ain’t change a single thing, even when I was the blind. ~ Rush by Destiny’s Child More than half (56%) of retirees said they would not change a thing about the choices they made around the timing of their retirement, with many saying simply that the time for retirement had come. “I was happy to finish when I did,” one man said, “… in the job that I was in, I enjoyed it but … you get a bit burnt out as you get a bit older. If I could have a job that was part time that I really enjoyed, then I’d be happy to do that but … I needed to stop for my own good and make a change into retirement.” Another man said if he had left it any longer, he may have been too old to enjoy retirement. “I think 70 is about the [time] … if you leave it much longer you’re … getting a bit old to get newer sort of interests.” However, almost a fifth (19%) said they may have made different financial decisions if they had their time again. “I wish I had more of the financial perspective that I do now earlier so I might’ve made some decisions differently,” one woman, who regretted extravagant clothes purchases made during her working life, said. While one man said he wished he had had the capacity to earn more money before retiring: “I would’ve run a different type of business perhaps that would’ve earned more money.” Interesting 13% said they would have retired earlier and 13% said they would have retired later.

Adjusting to a new way of life I did finally decide to retire – for me, that meant only working five days a week and not at night. ~ Gwen Fletcher Most people (69%) transitioned to retirement via either working part time, in a paid or unpaid/volunteer capacity or consulting. “I’ve done a few jobs,” one woman said. “I would have liked to do more.” Another man made an active decision, before retirement, to volunteer. “[I] stepped out of work straight into that Commonwealth Games activity, and that was my first experience at extended volunteering,” he said. “And that was where I started then picking up on that roll-on effect of meeting other people who volunteer in other things … there’s a great community out there of volunteers.” It is an activity that sometimes leads to temporary paid work – which he sometimes accepts and sometimes doesn’t. One woman, a former teacher, teaches art in retirement – but another, who was made redundant from her part-time job after returning from a holiday, never worked again. A lot of people, having been professionals during their working lives, had varying degrees of consulting work, for various periods of time in retirement. “I did some consulting for the first couple of years,” one woman said, “not a lot just a little bit.” Another man said that he had been slowing down the level of his consulting work for a period of four or five years. “I started out with a very busy consulting life where I was working eight days a week and then I’ve just gradually declined,” he said. “This financial year I probably worked maybe two or three days a month.” ‘Keeping busy’ was important to making a successful adjustment to retirement, according to almost half (44%) of respondents. Keeping busy meant a range of different things to different people, but typically included working – in a consulting, volunteer or part time capacity. “… the volunteering that I do gave me those things that I got from a job,” one man said. “… the activities give me that social interaction and contact … that you get from a, from a job… and it doesn’t have the downsides. I don’t have to be up at six o’clock every morning and catch the train in every day …” Another important factor for more than a third of people (38%) was maintaining friendships – for most (83%) of these people this included maintaining relationships with friends they had made at work.

In the words of one man, “The friends that I made at work … were the ones that have carried through into retirement. So we’ve got that common reference and it’s just been fantastic and I could never have planned for it.” However, this doesn’t mean that everyone found the adjustment easy. “I was highly invested in my job,” one woman said, “not the money but a sense of doing something worthwhile with other people that I liked. I miss the social aspect of work tonnes and tonnes and being a doing it person, achieving sort of person, it was really hard not to have something that had goals built into it and not to have somewhere to go everyday, and not to have things to do and not to be rushing about … having to absolutely change [your] lifestyle, that’s a really hard adjustment.” For the most part, people (73%) felt their partner adjusted well to retirement. But this did not always mean the adjustment period was easy. “He’s pleased to see me at home,” one woman observed. “Sometimes it’s a bit irritating when he says, ‘Well what are we going to do today?’ And it was always going to be irritating…” Many people talked about a reshuffle of household chores following a partner’s retirement. “I took over some of the jobs that she was doing for me, which she’d got to like,” one man said. “She even got a macabre sort of enjoyment out of doing the lawns.” Some men reported feeling that they got under their wives feet, “When I stopped working and slowed down, the first three months I was home she told me to go out and get a job about four times because I was in her house,” one said. One man was so uncomfortable with retirement he returned to consulting. Health and money issues made retirement more problematic for some people. “[my wife] was concerned that we may not have enough money,” one man said. “She quite enjoyed working part time and when the opportunity came up full time she didn’t … hesitate.” However, many people felt that they and their partners adjusted well and enjoyed being able to spend more time in each other’s company, “It actually made it easier for us to do things together,” one woman observed. As for the wider family - almost all (82%) said their families reacted well to their retirement. As one man put it, “They see it as a natural extension.” In the words of another respondent, “I don’t think they thought it was anything to do with them.”

Exceeding Expectations Age is a question of mind over matter. If you don’t mind, it doesn’t matter. ~ Leroy “Satchel” Paige Most people (63%) said retirement had either met (44%) or exceeded (19%) their expectations, although many admitted they went through a period of adjustment on retirement. “I knew there were going to be some adjustment issues,” one man said. “[I] was prepared for those. The main one was going from a full-on and allencompassing [work] environment [where there was] a lot of interaction with colleagues and suddenly that’s gone... I was aware of that [so] I haven’t found it too bad.” Some people (13%) said retirement had not met their expectations: “I’ve had a few health problems, [my partner’s] had a few health problems [and] we don’t have neighbours who do things in backyards or that kind of stuff… it’s a different lifestyle.” A further 13% of people said they had no expectations, with one man saying, “I just wonder... how I actually found time to go to work because… the spare time just isn’t there so much.” One woman expressed adjustment issues: “…it’s actually worked out to be quite good; once I realised I was retired … it took a while to decide that’s what had happened and I got bored and then I had to figure out what to do…” It took one man a few years to be able to mow the lawn during the week and not on the weekend like everyone else that was working did!

The Best of Times, The Worst of Times The trouble with retirement is that you never get a day off. ~ Abe Lemons

The best thing about retirement for many people (50%) is that they can now choose how they spend their time and they now have the time to explore the things they have always wanted to do. Some were very specific, citing things like going back to study, spending more time with grandchildren, doing their artwork, etc. while others were more general: “Better time management in a sense that you can pick and choose when you do things,” one man said. Others (33%) described this as ‘freedom’. “…beforehand... nothing [was] spontaneous,” one man said, “everything had to be arranged whereas now if you want to do something on the spur of the moment it can be done.” Or, in the words of another: “freedom to do what you want. And include work in that.” Flexibility was the term used by 17% of respondents. “… it’s the flexibility that it gives you,” one man, who continued to work in a casual voluntary and paid capacity, said. “I’m able to do something for a few hours on one job; [then] move to something completely different … for another few hours… But, at the same time, if there are things that I must do, for whatever reason, it’s easy to change.” The worst thing about retirement for 40% of people interviewed, was not working – or more specifically, the lack of social interaction previously enjoyed when working. “… my environment was inside work and I was seeing people all the time so you do tend to miss the … office interaction in the building,” one man said. “My world becomes my world… when you’re working with other people there [are] other people’s worlds as well.” One woman missed the company of younger women and being looked to for advice. “I have an affinity with younger girls... 30, 40 year old girls,” she said. “I miss listening to girls and what they’re going to do… it’s nice when they ask you, ‘Well, what did you do?’ or ‘Do you think ...?’ I really miss that...” Almost a third (27%) said a negative was that they are old, or are perceived as old, by themselves and/or by others. “That’s really the worst thing,” one man lamented. “…retirement – we should have it at the start of our lives …to do all those things, and then work when we’re older.” But probably most telling of all was that 33% said there was nothing negative about retirement at all.

The Lifestyle of the Retiree Grow old with me! The best is yet to be. ~Robert Browning

Almost half (46%) of the people interviewed said that their lifestyles in retirement were just what they expected. “I knew myself reasonably well. I’m a bit of a home husband,” one said. “…if you didn’t enjoy doing that sort of stuff you could be in trouble.” This man also said that while he got what he expected, he may have transitioned to retirement gradually if he had had the opportunity: “… one of the things that I could have done is combined a little bit of probably part-time work as opposed to full-time.” Others were much more content. “… we’ve both been very lucky because we’ve both got good health …and I think that’s a key to enjoying life,” she said, “…financially we can cope.” Some particularly mentioned the ‘added dimension’ that grandchildren brought to their retirement. A further 23% said their lifestyle was what they expected, but added a rider. These people talked about the impact of things, both positive and negative, that were not entirely predictable, such as poor health, death and the birth of grandchildren. “The fact that my husband has health problems,” one woman said. “It conceals there are changes which may not have occurred so it’s not a black and white thing.” One man lamented not travelling as much as he would have liked, due to his wife’s desire to be close to grandchildren. “…we help out babysitting and so on and my wife doesn’t like to be away from them … for too long,” he said. Almost a third (31%) said their lifestyle is not what they expected. One woman said she had expected retirement to be more ‘luxurious’, blaming her husband’s concern that the money would run out for the fact that it is not. “it’s definitely not luxurious, our retirement, and I guess it could be, but when it comes to the decision of using more of the money … we decide against that and I guess that’s because of [my husband] being as conservative as he is; about how he wants to manage the money.” Another retiree said, “My expectation was it would be slower,” he said, “but ... it’s certainly not as slow ... So my expectation and what actually happened were not quite the same.”

Busy – as usual As we live longer and healthier for longer, we need to keep ourselves busy... ~ Evelyn Glenne

Most people (63%) said they were as busy, if not busier, in retirement than they had been when working – but in a different way. As one woman said: “… It’s just different. I’m doing a lot of different things that I wouldn’t have been doing when I was working… it’s a different type of busyness… It’s perhaps more leisurely, but it’s still busy.” And that’s the way many people like it – as another woman said, “…it certainly wasn’t like a holiday but it has the flexibility… I like being able to have my own timetable … to be able to stick with how my body worked rather than someone else’s timetable.” The pace of retirement in some cases seemed to reflect their level of activity before they retired – or in one case, the level of activity expected by their spouse: “[my partner’s] work ethic doesn’t allow me to read books in the middle of the day because that’s a waste of time.”

Hobbies A hobby a day keeps the doldrums away. ~ Phyllis McGinley

Retirees lead busy, productive lives and are engaged in a wide range of different activities and/or hobbies. A few formally belong to groups, but most are pursuing their own interests and enjoying smelling the roses. More than half (56%) nominated a physical activity as a major retirement interest, typically walking and golf, although one man was far more energetic: “I go four times a week to the gym, for a couple of hours each time.” Many people (44%) also had more sedentary interests, such as cooking, reading and enjoying their grandchildren. More than a third (38%) nominated catching up with friends on a more frequent and relaxed basis as a favourite pastime: “the walking group… happens to be all the old workmates of mine,” one man said. “And so it’s a weekly activity for most of the year … we do that on a Monday and then on a Thursday we all go and have lunch together.” Almost a third (31%) of people were also giving back to their communities, volunteering in a range of different ways – at a community and sometimes a government level: “The volunteering I do with the City of Melbourne is something I really enjoy, and I consider that a hobby,” one man said. The same number of people (31%) enjoyed gardening and a quarter (25%) were involved in education (either furthering their own or sharing their knowledge or both) via community courses and/or the University of the Third Age.

Reading Habits I declare after all there is no enjoyment like reading! ~ Jane Austen, Pride and Prejudice Most retirees (75%) are avid book readers, with 33% of them (typically women) belonging to a book club. Subjects of interest range from biographies to cookbooks to religion, art and politics. Even those who were not all that interested in reading pre-retirement were encouraged (often by their wives) to take it up. “He used to always read only technical things,” one wife observed, “[but] since I joined a book group he’s been reading books… he reads like crazy now.” Keeping up-to-date with news and current and affairs was also important to retirees, with 63% saying they regularly read the news via a newspaper (usually the metro daily) and/or, interestingly, online. “I get a lot of my information online now,” one man said “I’m hooked on my iPad… this morning when I was coming in on the train, I was reading stuff on the iPad… typically snatches of news.” Some people (25%) liked to keep up with industry news from their former professions and others were keen to keep learning and so read educational material associated with courses of study or hobbies. “I’ve been enrolling occasionally for University subjects,” one man said. “That’s another stimulation again, the required reading for that.”

Making the Money Last You can be young without money but you can’t be old without it. ~ Tennessee Williams An overwhelming majority (67%) of interviewees said they were managing just fine on their retirement income: “…money wise it hasn’t actually been a big drama,” one man said. Another professed to being relaxed about money because of the planning done leading up to retirement while another said it was all due to the way their finances were structured. Some (20%) were not worried about their retirement income because their partner was still working. The remaining 33% of respondents all said they were managing okay but had some concerns. These concerns were primarily centered around making the money last, the cost of living, particularly given ongoing concerns about the state of worldwide economies, the amount of travelling they might want to do and, in the case of one respondent, bringing up a child. These concerns were well summarized by one man who said: “We are [managing okay] at the moment. Having said that, you’ve got to keep your eye on the end-ball as to how long it’s likely to last. And just at the moment, I think with the economy as it stands, it’s probably not forecast to last as long as maybe it might have done had we not gone through the GFC and this second dip we seem to be going through at the moment. But yes, in terms of the lifestyle, we’ve enjoyed it and I think we’re living within our means at the moment.” None of the respondents indicated that they were not managing okay.

Skiers Any man who has $10,000 left when he dies is a failure. ~ Errol Flynn For most (55%) respondents, leaving an inheritance was not a priority – making their money last their entire retirement was much more important. Echoing a recurrent theme, one man said: “[we] have been skiing – so spending the kids’ inheritance… When I did the initial planning, it was on the basis that my superannuation and investments would provide for our life… not necessarily as an inheritance.” The children, he said, would inherit the family home, the inference being that this should suffice. This sentiment, that children would inherit the home and whatever was left over, was also mentioned more than once. “There’s the house which will be worth a reasonable amount,” one woman said, “we’ve educated them. They’ve got good jobs. So, for me I don’t think that’s terribly important.” This sentiment that financially, their obligations to children were over was also echoed by one retiree who said that while he, like 45% of respondents, would like to leave something for his children to inherit, they “had the benefit of a good education” and should look after themselves. “I don’t want [them] to rely on some inheritance as a need to help them,” he said, “they can look after themselves.” Interestingly, none of the respondents talked about leaving an inheritance as a priority, although one did say: “I hadn’t thought of how much we leave them [but] … we’ll be able to leave them something ...substantial.”

In Denial Old age is not for sissies ~ Bette Davis

An overwhelming majority (69%) of retirees were, perhaps surprisingly, in denial about aged care, with many of them saying they were not only not prepared for aged care expenses, but also didn’t want to think about it. “No,” said one man emphatically, “with a capital N. It will happen ... when it happens, it happens.” However, while many professed to be not at all prepared for aged care expenses, and seemingly unwilling to even think about it extensively, many said it was, ‘in the back of my mind’ with the idea often put there after being confronted with the reality of aged care expenses via experience with their own parents and/or partners. “Well that’s in my head at the moment,” one woman said, “that may be a situation with [my partner] and the answer is no. I don’t choose to think about it but I think it is going to become a reality.” Even some of the 31% who said they were prepared for aged care expenses expressed concern about their money lasting. “I don’t know how you can plan for aged care expenses to that degree,” one man said, “… I’m presuming that I will go into aged care in another 20 years. I’ve got no idea what that landscape will look like .... All I can hope is that the money that I have is still in super at that stage, and our house … will be adequate to provide for a reasonable standard of aged care.”

Advice for the almost-retired The question isn’t at what age I want to retire, it’s at what income. ~ George Foreman The piece of advice metered out first by 40% of retired interviewees to the nearlyretired is to plan ahead financially. As one woman, who advised an exit strategy of at least five years, lamented, “… my generation, we weren’t very financially savvy… it would be nice to retire at 60, but you’ve got to save for that.” This woman also urged pre-retirees to consider the financial impact of lifestyle choices such as downsizing and renovating and do them while still employed rather than trying to fund them in retirement. Another retiree, who advised others to, “get your finances right… know what your income is going to be; settle on that” before exiting the workplace, also warned that income in retirement is “never going to be what you’ve been earning so you need to come to terms with that…” But the most popular piece of advice, expressed in different ways by 80% of retirees was a call for pre-retirees to think carefully about what is probably best described as their mental health in retirement. “… be prepared to reconstruct your identity,” one woman said. “… you need to feel you’re doing something worthwhile and making some contribution even if it’s just cooking for your family … you need some social things and you need ... I, at least, need quite a lot for my mind.” Suggestions for protecting mental health in retirement were themed around selfknowledge; finding hobbies and interests; keeping the brain active by reading, doing crosswords and puzzles, etc. and maintaining a social network, perhaps with people met at work. “Don’t lock yourself up and brood,” cautioned one woman. Interestingly, while one retiree recommended maintaining a routine based on life at work: “it’s not a holiday… my father got up at five whether he was going to work or not and I think that’s a good way to be. Don’t change your routine.”; another suggested a polar opposite approach: “create some interests [that] maintain some flexibility,” she advised. “I’ve got friends … and they’re really stuck to a structure and they fill up their whole day; their whole week with activity in a planned way because that’s what their work life used to be like and it’s a bit sad because there’s many other things they could do but they’ve got themselves regimented and they can’t do anything different or new...” Many (40%) retirees advised people to take their time thinking about retirement and ease into it if possible. “Do some planning,” urged one. “A bit of research in preparation and think about your needs … and how you’ll fulfill those when you’re not working.” Or, as expressed more succinctly by another: when thinking about retirement, simply, “Don’t rush.” 24

Summary

No matter how long retirees have been retired, in the main they are engaged in doing something that enriches their retirement. Most are still working, on a part-time, contract or volunteer basis. Some are looking after the grandchildren and some are immersing themselves in hobbies that span a wide range of interests. Most have a network of friends and enjoy being able to spend more time catching up with them. In the main, the retirees we interviewed are managing on their retirement income and have the capacity to enjoy their retirement. If they had their time again, they would change very little – although some said they would spend more time planning ahead financially and transitioning from work to retirement via part-time work. One of the reasons for this was financial. Given uncertain market conditions, retirees wanted to feel comfortable that the money they had to retire on would be enough. This was an interesting finding because although some people express concern about making their money last, an overwhelming majority had not thought about nor planned for aged care expenses. Another reason many people felt the need to transition to retirement, rather than stop work cold turkey, was probably the fact that they although they later enjoyed retirement, they found exiting the workplace a very emotional, sometimes even depressing experience. To help pre-retirees successfully transition to retirement, financial planners will need to deliver expert, empathetic financial advice which addresses both their financial and their emotional needs. It may also fall to planners to alert their clients to the need to plan for their very old age and aged care expenses long before they think they will actually need it. I am a passionate believer in the importance of having a vision, setting goals and creating a plan so that you achieve them. Its important, however, not to give too much of your attention to the future that you don’t enjoy your life as it is. At Global Partnerships Financial Consulting our philosophy is to equip clients with the knowledge and wisdom to ensure they live their lives free of stress and worry about money. We believe that when you take control of your financial future you have additional resources to pursue your personal life goals. This is where the Wheel of Life illustrated below is important. It helps you consider each area of your life in turn and assess what’s off balance. And so, it helps you identify areas that need more attention. Our role at GPFC is to coach and inspire you to live the life you want, free of stress and worry about your financial affairs so you can concentrate on the other areas of your life.

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Money isnâ&#x20AC;&#x2122;t the most important thing in life, but it touches everything that is.

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